Infosys’ Positive FY26 Outlook Sparks Sector-Wide Rally in Indian IT Stocks
Indian IT stocks soared on April 21, as upbeat revenue guidance and optimistic commentary from Infosys lifted market sentiment across the technology sector. The Nifty IT index emerged as one of the best-performing sectoral indices, extending its winning streak and registering a robust 3.46% gain on Monday, with a 5.45% rise over the last five trading sessions.
Major tech players including Mphasis, Tech Mahindra, HCL Technologies, and Coforge witnessed significant gains during the session, reflecting investor confidence in a potential turnaround in demand outlook and earnings momentum for FY2025-26.
Highlights:
Nifty IT index rises 3.46%, fifth consecutive session in green
Sectoral rally triggered by Infosys’ FY26 revenue guidance and outlook
Mphasis, Tech Mahindra, Coforge, HCL Tech among top gainers
Mphasis, Tech Mahindra, Coforge Lead Gains; HCL Tech and TCS Advance
Among the biggest movers, Mphasis led the rally with a 6.37% gain, reaching an intraday high of Rs 2,418.50 on the NSE. Tech Mahindra followed closely, climbing 6.2% to Rs 1,389, while Coforge and HCL Technologies posted gains of 4.8% and 3.39%, respectively.
Index heavyweights Tata Consultancy Services (TCS) and Infosys also contributed to the sectoral strength, with both stocks adding between 1% and 3% during the session.
The broad-based rally came in response to Infosys’ earnings report for Q4FY25 and its forward-looking revenue guidance for FY26. Despite a modest decline in net profit, the company’s positive management commentary and guidance range of 0-3% revenue growth in constant currency terms lifted expectations for a demand recovery in the latter half of FY26.
Highlights:
Mphasis up 6.37% to Rs 2,418.50
Tech Mahindra gains 6.2% to Rs 1,389
Coforge and HCL Tech rise 4.8% and 3.39%, respectively
TCS and Infosys trade higher by 1–3%
Infosys Q4 Earnings Miss But Guidance Boosts Sentiment
Infosys, India’s second-largest IT services provider, posted a 12% YoY decline in net profit to Rs 7,033 crore for the March quarter of FY25. However, consolidated revenue rose 7.9% YoY to Rs 40,925 crore, in line with analysts’ estimates.
While earnings figures missed expectations, investors focused on the revenue guidance and the outlook for FY26, which suggested a “stable to marginally improving environment”. This commentary struck a chord with the market, as it indicated potential stabilization in demand after several quarters of muted growth across global IT services.
Brokerage Motilal Oswal noted that the upper end of Infosys’ FY26 guidance assumes a favorable demand environment. It further projected 2% organic growth for Infosys in FY26, marking a return to a modest growth trajectory after a period of cautious client spending and slower deal closures.
Highlights:
Infosys Q4 net profit drops 12% YoY to Rs 7,033 crore
Revenue up 7.9% YoY to Rs 40,925 crore
FY26 guidance: 0-3% revenue growth in constant currency
Motilal Oswal expects 2% organic growth for Infosys in FY26
Mixed Brokerage Views Despite Sector Optimism
Although investor sentiment improved following the earnings report, brokerage opinions remained mixed, particularly on Infosys’ valuation and near-term growth headwinds. Some brokerages have cut their target prices for Infosys stock, citing the earnings miss and ongoing macro uncertainties in key markets such as the US and Europe.
However, the broader sector reaction suggests that the market is pricing in early signs of recovery. The collective uptrend in IT stocks may also be attributed to short-covering, sector rotation, and bargain-buying ahead of other large-cap IT earnings announcements.
Highlights:
Infosys stock gains despite earnings miss due to positive guidance
Some brokerages trim target prices on Infosys amid concerns on earnings miss
Broader sector optimism reflects hopes of H2FY26 demand revival
Outlook for Indian IT Sector Improves Ahead of FY26
The rally in Indian IT stocks signals a renewed investor confidence in the sector’s ability to navigate near-term macro headwinds and deliver stable earnings in FY26. The improved guidance from Infosys is being interpreted as an early indicator that client budgets may stabilize, leading to marginal improvements in deal activity and digital transformation spending later in the year.
The performance of other large-cap IT players like TCS, HCL Tech, and Wipro, along with their respective forward-looking commentaries, will be crucial in confirming whether the sector is indeed on the cusp of a broader recovery cycle.
Highlights:
Infosys guidance triggers positive sentiment shift for IT stocks
Analysts watching closely for confirmatory signals from peers
Sector outlook hinges on stabilization in global tech spending
